CONSENT TO SUBLEASE
The Sublease ("Sublease's, dated as of August 31, 2004, is entered into by
and between Euclid Network Solutions, Inc., a California corporation, as
sublessor ("Sublessor"), and SiVault Analytics, Inc., a Delaware corporation, as
sublessee ("Sublessee"), as a sublease under that certain Standard Office Lease
- Gross dated as of May 15, 2001 entered into by and between Xxxxx Xxxx Joint
Venture, a California general partnership, as Lessor ("Master Lease"), and
Sublessor, as Lessee, and amended by a First Amendment to Standard Office Lease
dated April 3, 2002, a Second Amendment to Standard Office Lease dated August 9,
2002, a Third Amendment to Standard Office Lease dated November 1, 2002, a
Fourth Amendment to Standard Office Lease dated November 27, 2002, a Fifth
Amendment to Standard Office Lease dated August 15, 2003, and a Sixth Amendment
to Standard Office Lease dated September 8, 2003 (collectively, the "Master
Lease"). A copy of the Master Lease is attached hereto as Exhibit A.
As conditions to Landlord's consent, to the sublet of the Sublet Premises,
it is understood and agreed as follows:
1. No Release. This Sublet Consent shall in no way release the Tenant, or
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any other person or entity claiming by, through, or under Tenant including,
without limitation, Subtenant, from any of its covenants, agreements,
liabilities and duties under the Lease (including, without limitation, ail
duties to cause and keep Landlord and other named or referred to in this Lease
fully insured and indemnified with respect to any acts or omissions of Subtenant
or its agents, employees, or invitees, or other matter arising by reason of the
Sublease or Subtenant's use or occupancy of the Sublet Premises), as. the same
may be amended from time to time, without respect to any provision to the
contrary in the Sublease. In no event shall anything contained in this Sublet
Consent be deemed a waiver of any of Landlord's rights under the Lease.
2. No Approval of Sublease. This Sublet Consent does not constitute
---------------------------
approval by Landlord of any of the provisions of the Sublease, or agreement
thereto or therewith, but only approval of the sublet of the Sublet Premises to
Subtenant.
3. No Amendment of Sublease. Tenant and Subtenant shall not amend in any
--------------------------
respect the Sublease without the prior written approval of Landlord. In no event
shall any such amendment, whether or not Landlord shall approve the same, affect
of modify or be deemed to affect or modify the Lease in any respect.
4. Limited Consent. This Sublet Consent shall be deemed limited solely to
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the Sublease, and Landlord reserves the right to consent or to withhold consent
with respect to any other matters under the Lease including, without limitation,
any proposed alterations to the Premises or the Sublet Premises, and to any
further or additional sublets, assignments, or other transfers of the Lease or
any interest therein or thereto, including, without limitation, a sub-sublet or
any assignment of this Sublease.
5. Tenant's Liability: Landlord's Remedies. Tenant shall be liable to
------------------------------------------
Landlord for any default under the Lease, whether such default is caused by
Tenant or Subtenant or anyone claiming by, through, or under either Tenant or
Subtenant. The foregoing shall not be deemed to
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restrict or diminish any right which Landlord may have against Subtenant
pursuant to the Lease, or in law or equity for violation of the Lease or
otherwise, including, without limitation, the right to enjoin or otherwise
restrain any violation of the Lease by Subtenant. Landlord may at any time
enforce the Lease against Tenant, Subtenant, or both.
6. Subordination to Lease. This Sublease is, in ail respects, subordinate
-----------------------
and subject to the Lease, as the same may be amended. Furthermore, in the case
of any conflict between the provisions of this Sublet Consent or the Lease and
the provisions of the Sublease, the provisions of this Sublet Consent or the
Lease, as the case may be, shall prevail unaffected by the Sublease.
7. Termination of Lease. If at any time prior to the expiration or
----------------------
termination of the Sublease, the Lease shall expire or terminate for any reason
(or Tenant's right to possession shall terminate without termination of the
Lease), the Sublease shall simultaneously expire or terminate. However,
Subtenant agrees, at the election and upon the written demand of Landlord, and
not otherwise, to attorn to Landlord for the remainder of the term of the
Sublease, such attornment to be upon all of the terms and conditions of the
Lease, with such reasonable modifications as Landlord may require, except that
the Minimum Rent set forth in the Sublease shall be substituted for the Minimum
Rent set forth in the Lease and the computation of Additional Rent as provided
in the Lease shall be modified as set forth in the Sublease.
The foregoing provisions of this Paragraph shall apply notwithstanding
that, as a matter of law, the Sublease may otherwise terminate upon the
termination of the Lease and shall be self-operative upon such written demand of
the Landlord, and not further instrument shall be required to give effect to
said provisions; provided, however, Subtenant agrees to execute an attornment
agreement, in form and substance acceptable to Landlord, pursuant to which
Subtenant confirms-that all obligations owed to Tenant under the Sublease shall
become obligations owed to Landlord for the balance of the term of the Sublease.
8. Services. Tenant and Subtenant hereby agree that Landlord may furnish to
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the Sublet Premises services requested by Subtenant other than or in addition to
those to be provided under the Lease, and xxxx the Subtenant directly for such
services for the convenience of and without notice to Tenant. Subtenant hereby
agrees to pay to Landlord all amounts that may become due for such services on
the due dates therefor. If Subtenant shall fail to make such payment, Tenant
agrees to pay such amounts to Landlord upon demand as Additional Rent under the
Lease, and the failure to pay the same upon demand shall be a default under the
Lease.
9. No Privity. Notwithstanding anything to the contrary in this Sublet
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Consent, in no event shall Landlord be deemed to be in privity of contract with
Subtenant or owe any obligation or duty to Subtenant under the Lease or
otherwise, any duties of Landlord under the Lease or required by law being in
favor of, for the benefit of and enforceable solely by Tenant.
10. Notices. Subtenant agrees to promptly deliver a copy to Landlord of all
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notices of default and ail other notices sent to Tenant under the Sublease, and
Tenant agrees to promptly deliver a copy to Landlord of all such notices seat to
Subtenant under the Sublease. All copies of any such notices shall be delivered
personally or sent either by recognized national overnight courier service or by
United States registered or certified mail, postage prepaid, return receipt
requested, to (insert name and address of owner or managing agent), with a copy
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to (insert name and address of owner's attorney), or to such other place or
persons as Landlord or its agents may from time to time designate.
11. Real Estate Brokers. Tenant and Subtenant jointly and severally agree
--------------------
to indemnify and hold Landlord harmless from all loss, costs (including, without
limitation, reasonable attorney's fees), damages, and expenses arising from any
claims or demands of any broker or finder for any commission or fee due or
alleged to be due in connection with the Sublease or this Sublet Consent.
12. Consent Conditioned: Parties Bound. Tenant and Subtenant understand
----------------------------------
that Landlord has agreed to consent to the sublet of the Sublet Premises to
Subtenant, and to execute this Sublet Consent conditioned upon Tenant's and
Subtenant's express acknowledgment of and agreement to be bound by all of the
terms and conditions hereof. By executing this Sublet Consent, Tenant and
Subtenant hereby acknowledge and agree to be bound by all of the terms and
conditions of this Sublet Consent.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Sublet Consent as of September 2004.
Tenant Landlord
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Euclid Network Solutions, Inc., Xxxxx Xxxx Joint Venture,
a California corporation a California general partnership
By: /s/ [illegible] By: /s/ [illegible]
------------------------- -------------------------
Its: CEO Its: PARTNER
------------------------- -------------------------
Subtenant
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SiVault Analytics, Inc.,
a Delaware corporation
By: /s/ Xxxxxxx Xxxxxxx
-------------------------
Its: CSO
-------------------------
E-3
SUBLEASE
1. PARTIES.
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This Sublease ("Sublease"), dated as of August 31, 2004, is entered into by
and between Euclid Network Solutions, Inc., a California corporation, as
sublessor ("Sublessor"), and SiVault Analytics, Inc., a Delaware corporation, as
sublessee ("Sublessee"), as a sublease under that certain Standard Office Lease
- Gross dated as of May 15, 2001 entered into by and between Xxxxx Xxxx Joint
Venture, a California general partnership, as Lessor ("Master Lessor"), and
Sublessor, as Lessee, and amended by a First Amendment to Standard Office Lease
dated April 3, 2002, a Second Amendment to Standard Office Lease dated August 9,
2002, a Third Amendment to Standard Office Lease dated November 1, 2002, a
Fourth Amendment to Standard Office Lease dated November 27,. 2002, a Fifth
Amendment to Standard Office Lease dated August 15, 2003, and a Sixth Amendment
to Standard Office Lease dated September 8, 2003 (collectively, the "Master
Lease"). A copy of the Master Lease is attached hereto as EXHD31T A. Except as
otherwise set forth herein, capitalized terms used herein shall have the same
meanings as such terms have in the Master Lease.
2. PREMISES.
--------
2.1 Subject to the provisions of paragraphs 2.2 through 2.4 below,
Sublessor leases to Sublessee and Sublessee hires from Sublessor those premises
consisting of approximately thirty-five thousand four hundred thirty-two
(35,432) square feet of space, as more particularly shown in Exhibit B (the
"Premises"), on the third floor of that building commonly known and described as
0000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx (the "Building"). Sublessee agrees
to accept the Premises on the Commencement Date as being suitable for
Sublessee's intended use and in good operating order, condition and repair in
its then existing "AS IS" condition. Sublessor makes no warranty or
representation regarding the condition of the Premises. Sublessee shall have the
non-exclusive right to use its pro rata share of unreserved parking spaces
within the Office Building Project pursuant to the provisions of the Master
Lease.
2.2 For the first one hundred and eighty (180) days of the Term the
Premises shall consist of the approximately fifteen thousand (15,000) square
feet outlined on Exhibit B attached hereto. Within sixty (60) days after the
Commencement Date, Sublessor shall remove all of Sublessor's equipment from the
Lab area, as shown on Exhibit B, and immediately upon such removal the Lab area
shall become part of the Premises. Furthermore, Sublessor shall vacate Data
Center 2 shown on Exhibit B and remove all of Sublessor's equipment from Data
Center 2 within sixty (60) days after Sublessor's receipt of Sublessee's
Financial Notice (defined below). Immediately upon such vacation of Data Center
2, it will become part of the Premises. Prior to receiving Sublessee's Financial
Notice (defined below), Sublessor will permit Sublessee to install two racks in
Data Center 2 and move Sublessee's equipment to Data Center 2. Furthermore,
Sublessor shall vacate the network operations center shown on Exhibit B (the
"NOC"), in its "AS IS" condition, but with all equipment in place, within one
hundred fifty (150) days after Sublessor's receipt of Sublessee's Financial
Status Notice (defined below). Immediately upon such vacation of the NOC, the
NOC shall become part of the Premises. If Sublessor fails to vacate the NOC
within such 150-day period, then the Base Rent allocable to the NOC shall be
abated until such time as Sublessor has vacated the NOC. In addition to the
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Premises, Sublessee shall have the right to use, in common with Sublessor, the
Telco Room, the UPS Room and the men's and women's Restrooms as shown on Exhibit
B.
Sublessee shall provide forty-eight hours (48) hours prior notice to
Sublessor of its desire to use the large conference room as shown in Exhibit B.
Such notice shall include the time it desires to use the large conference room.
Sublessor shall respond to Sublessee within four (4) business hours of the
availability of the large conference room to Sublessee and shall make good faith
efforts to make such room available to Sublessee.
2.3 Sublessee acknowledges that during the Term of the Sublease, Sublessor
shall retain the use of the Data Center 1 and the Raised Floor Lab, as shown on
Exhibit B, consisting of approximately 700 square feet, and the Data Center 1
and the Raised Floor Lab shall not be included in the Premises subleased to
Sublessee. Sublessee further acknowledges that Sublessee's use of the Telco Room
and the UPS Room shall be shared with Sublessor. Sublessor reserves for itself,
its agents, employees and contractors, access to the Data Center 1, the Raised
Floor Lab, the Telco Room, and the UPS Room through the Premises at any and all
times during the Term of this Sublease and Sublessor shall not be required to
provide Sublessee with prior notice of any such access. Sublessor shall use
commercially reasonable efforts to minimize any interference that such access
may cause to Sublessee's use of the Premises.
2.4 On or before January 2, 2005, Sublessee shall provide Sublessor with
satisfactory evidence that (i) Sublessee has a current Net Cash Balance (defined
below) of not less than Three Million Dollars ($3,000,000), or (ii) Sublessee
has obtained new equity financing in an amount not less than Five Million
Dollars ($5,000,000) ("Sublessee's Financial Status Notice"). Such evidence
shall be confirmed by a U.S. chartered bank, thrift or other financial
institution. Within ninety (90) days after Sublessor's receipt of Sublessee's
Financial Status Notice, Sublessor shall vacate the balance of the Premises then
occupied by Sublessor, if any (other than the NOC and Data Center 1), and within
one hundred fifty (150) day after Sublessor's receipt of Sublessee's Financial
Status Notice, Sublessor shall vacate the NOC.
2.5 Should Sublessor be unable to vacate the Premises within the ninety
(90) day period following receipt of Sublesse's Financial Status Notice
("Sublessor's Delay"), Sublessor shall have the right to extend its occupancy up
to an additional ninety (90) days by providing Sublessee thirty (30) day advance
written notice to Sublesse. In the event of Sublessor's Delay, Base Rent shall
continue at the same rate as rent due for months 1 through 6 as set forth in
paragraph 4.1 below. Upon Sublessor's vacating the Premises, the rent schedule
shall resume as set forth in paragraph 4.1 below.
3. TERM.
----
The term of the Sublease ("Term") shall be approximately forty-five (45)
months, commencing on the date (the "Commencement Date") that is the later of
(i) the date the Sublease and Master Lessor's consent to the Sublease have been
fully executed, and (ii) September 1, 2004, and expiring May 31, 2008. Upon
determination of the actual Commencement Date, the parties shall execute a
memorandum confirming the Commencement Date.
E-5
4. RENT.
----
4.1 Sublessee shall pay to Sublessor as Base Rent for the Premises the
amounts set forth in the schedule below. Sublessee shall pay to Sublessor, upon
execution hereof, the sum of Seventy-eight Thousand Seven Hundred Fifty and
no/100ths Dollars ($78,750.00), which shall be applied to the Base Rent due for
the first five (5) months of the Term, plus additional Base Rent in the amount
of ($47,250.00). Commencing on the first day of the sixth (6`~) month of the
Term, Base Rent shall be paid on or before the first day of each calendar month
of the Term without prior notice, demand, deduction or offset whatsoever.
Months of Term Base Rent
1 through 6 $15,750.00/month
7 through 12 $36,636.60/month
13 through 24: $38,381.20/month
25 through 36: $40,125.80/month
37 through 45: $41,870.40/month
4.2 In addition to the Base Rent, Sublessee shall pay to Sublessor, as
additional rent, Sublessee's pro rata share of the Operating Expense Increase,
in the manner provided in the Master Lease. Sublessee acknowledges that the
monthly Base Rent does not include utilities; therefore, Sublessee shall also
pay to Sublessor on a monthly basis Sublessee's pro rata share of all utilities
(gas and electricity) supplied to Suite 300, within ten (10) days after receipt
of a statement from Sublessor. Sublessee's pro rata share of such utilities
charges shall be based upon the ratio of the area of the Premises to the total
area of Suite 300 (35,432 sq. ft.). The term "Rent" when used in this Sublease
shall mean the Base Rent and any and all additional rent payable under this
Sublease. Rent for any fractional part of a calendar month at the commencement
or expiration of the Term shall be a prorated amount of the Rent for a full
calendar month based upon a thirty (30) day month.
5. POSSESSION.
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Sublessor represents to Sublessee that Sublessor has been given possession
of the Premises pursuant to the Master Lease. Sublessor shall tender possession
of the Premises to Sublessee on or before the Commencement Date.
6. ' DEPOSIT.
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6.1 Upon the execution of this Sublease, Sublessee shall deliver to
Sublessor a cash deposit ("Security Deposit") in the amount of Fifty-five
Thousand Five Hundred Dollars ($55,500) as security for the faithful performance
by Sublessee of all of Sublessee's obligations under this Sublease. If Sublessee
is in default under this Sublease, Sublessor may, but without obligation to do
so, use or apply all or any portion of the Security Deposit to the extent
necessary to cure the default or to compensate Sublessor for all damage
sustained by Sublessor as a result of Sublessee's default. If Sublessor uses or
applies any portion of the Security Deposit for such purposes, Sublessee shall,
within five (5) days after demand from Sublessor, restore the Security Deposit
to its original amount. Provided that Sublessee is not in default under this
E-6
Sublease, Sublessor shall comply with the provisions of the Master Lease
regarding the return of the Security Deposit to Sublessee. Sublessee shall not
at any time be entitled to interest on the Security Deposit.
6.2 On or before January 2, 2005 Sublessee shall deposit an additional
Seventy Thousand One Hundred Eleven and 20/100ths Dollars ($70,111.20) with
Sublessor to increase the Security Deposit to One Hundred Twenty-five Thousand
Six Hundred Eleven and 20/100ths Dollars ($125,611.20). If at any time after
January 2, 2005, Sublessee's Net Cash Balance falls below Four Million Dollars
($4,000,000), then the Security Deposit shall be increased to One Hundred
Sixty-seven Thousand Four Hundred Eighty-one and 60/100ths Dollars ($167,481.60)
and Sublessee shall deliver the difference between such amount and the then
current balance of the Security Deposit to Sublessor within five (5) business
days after Sublessor's written request therefor. If at any time after January 2,
2005, Sublessee's Net Cash Balance falls below Three Million Dollars
($3,000,000), then the Security Deposit shall be increased to Two Hundred Nine
Thousand Three Hundred Fifty-two Dollars $209,352) and Sublessee shall deliver
the difference between such amount and the then current balance of the Security
Deposit to Sublessor within five (5) business days after Sublessor's written
request therefor.
6.3 For purposes of this Lease, Sublessee's "Net Cash Balance" shall mean
Sublessee's total unrestricted cash balances in any open bank accounts less all
debt. Sublessor shall have the right to request bank verification of Sublessee's
Net Cash Balance on a quarterly basis, and Sublessee shall provide such
information to Sublessor within five (5) business days after Sublessor's written
request therefor.
7. USE.
Subject to receipt of Master Lessor's consent, Sublessee shall be permitted
to use the Premises only for general office, marketing, and sales and for no
other purposes without the prior written consent of Sublessor.
8. ASSIGNMENT AND SUBLETTING.
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Any further subletting of the Premises or any assignment of this Sublease
shall be subject to the terms and conditions of the Master Lease which have been
incorporated herein by reference.
9. OTHER PROVISIONS OF SUBLEASE.
-------------------------------
9.1 Except as provided in this Sublease, all terms and conditions of the
Master Lease are incorporated into and made a part of this Sublease as if
Sublessor were the "Lessor" thereunder and Sublessee the "Lessee" thereunder,
except that (i) the following shall be excluded: paragraphs 1.1, 1.2, 1.4 -
1.10, inclusive, 4.1, 6.1, 8.2, 15, 17, 23, 48, 50-54 inclusive, 56, 58, 60, 64,
65; Exhibit C to the Master Lease; and each of the amendments to the Master
Lease; and (ii) all references to "Lessor" in paragraphs 7.1, 8.4, 9 and 11.1 of
the Master Lease shall be deemed to refer to Master Lessor. Notwithstanding the
fact that a provision of the Master Lease is not made a part of this Sublease,
this Sublease is nevertheless subject and subordinate to all of the terms of the
Master Lease.
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9.2 Sublessor represents to Sublessee that, as of the Effective Date, (i)
the Master Lease is unmodified and in full force and effect, (ii) Sublessor, to
Sublessor's knowledge, is not in default under the Master Lease, (iii) to
Sublessor's knowledge, no event has occurred or is occurring that would result
in Sublessor's default under the Master Lease, and (iv) to Sublessor's
knowledge, the Master Lessor is not in default under the Master Lease.
9.3 Notwithstanding the foregoing incorporation of the Master Lease,
Sublessor shall not be responsible for the performance or the furnishing of any
maintenance, repair, replacement or other obligations or services to be
performed or furnished by Master Lessor under the Master Lease. Sublessor shall
not be liable to Sublessee for any failure by Master Lessor under the Master
Lease to perform its obligations or to furnish any services or utilities to be
furnished by Master Lessor under the Master Lease, nor shall such failure by
Master Lessor under the Master Lease excuse performance by Sublessee of its
obligations under this Sublease except to the extent the failure by Master
Lessor excuses performance by Sublessor under the Master Lease. In no event
shall Sublessor be deemed to have granted to Sublessee any right greater than
Sublessor had the power to grant under the Master Lease.
9.4 Except as otherwise provided in this Sublease, Sublessee agrees to
observe, comply with, and perform, all of the terms and conditions applicable to
Sublessor as Tenant under the Master Lease, except that the obligation to pay
Rent to Master Lessor under the Master Lease shall be considered performed by
Sublessee to the extent and in the amount Rent is paid to Sublessor in
accordance with this Sublease. Sublessee shall not commit or suffer any act or
omission by Sublessee or by any sub-sublessee or assignee of Sublessee, or by
their respective employees, agents, contractors, representatives or invitees,
that will violate any of the provisions of the Master Lease.
9.5 If the Master Lease terminates, this Sublease shall terminate and the
parties shall be relieved of any liability or obligation thereafter accruing
under this Sublease, except as otherwise expressly provided in the Master Lease
or this Sublease. Notwithstanding the preceding sentence, if the Master Lease
terminates as a result of a default or breach by Sublessor or Sublessee under
this Sublease and/or the Master Lease, then the defaulting party shall be liable
to the nondefaulting party for the damage suffered as a result of such
termination.
9.6 If the Master Lease gives Sublessor any right to terminate the Master
Lease in the event of the partial or total damage, destruction, or condemnation
of the Premises or the building or Project of which the Premises are a part, the
exercise of such right by Sublessor shall not constitute a default or breach
hereunder, provided that Sublessor shall give Sublessee written notice (the
"Termination Notice") of Sublessor's intent to exercise such right of
termination at least thirty (30) days in advance of such exercise, and any such
exercise of the right to terminate by Sublessor further shall be subject to
Sublessee's prior written approval, which shall not unreasonably be withheld.
If, within twenty (20) days after receiving the Termination Notice, Sublessee
fails to deliver to Sublessor its written disapproval of such termination by
Sublessor (Sublessee's approval shall not unreasonably be withheld), Sublessee
conclusively shall be deemed to have consented to such termination.
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10. SUBLESSOR'S OBLIGATIONS.
------------------------
Sublessor agrees that Sublessee shall be entitled to receive all services,
utilities and repairs to be provided by Master Lessor under the Master Lease to
Sublessor. Sublessee shall look solely to Master Lessor under the Master Lease
for all such services and utilities and shall not, under any circumstances, seek
or require Sublessor to perform any of such services or provide any utilities,
nor shall Sublessee make any claim upon Sublessor for any damages which may
arise by reason of Master Lessor's default under the Master Lease except to the
extent such default is caused by Sublessor. Any condition resulting from a
default by Master Lessor under the Master Lease (other than a default caused by
Sublessor) shall not constitute as between Sublessor and Sublessee an eviction,
actual or constructive, of Sublessee and no such default shall excuse Sublessee
from the performance or observance of any of its obligations to be performed or
observed under this Sublease, or entitle Sublessee to receive any reduction in
or abatement of the Rent provided for in this Sublease, except to the extent
Sublessor receives an abatement in its Rent under the Master Lease with respect
to the Premises. Sublessor shall promptly give written notice to Sublessee of
any abatement in Rent Sublessor receives from Master Lessor, or to which
Sublessor believes it is entitled.
E-9
11. DEFAULT BY SUBLESSEE.
----------------------
If Sublessee shall be in default of any covenant of, or shall fail to honor
any obligation under, this Sublease, Sublessor, upon giving any required notice
and subject to the right, if any, of Sublessee to cure any such default within
any applicable cure period, shall have available to it against Sublessee all of
the remedies available to Master Lessor under the Master Lease in the event of
such a default on the part of Sublessor thereunder.
12. CONDITION TO SUBLEASE.
-----------------------
The execution of this Sublease by Sublessor and Sublessee shall not bind
either party unless and until Master Lessor consents to this Sublease.
13. INDEMNIFICATION.
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13.1 Sublessor shall indemnify, defend and hold Sublessee harmless from and
against all costs, losses, damages, liabilities and expenses (including, without
limitation, reasonable legal counsel fees and disbursements) incurred by
Sublessee by reason of or arising out of Sublessor's failure to perform or
comply with any of the agreements, terms covenants or conditions of the Master
Lease to be performed or observed thereunder by Sublessor prior to the Effective
Date.
13.2 Sublessee shall indemnify, defend and hold Sublessor harmless from and
against all costs, losses, damages, liabilities and expenses (including, without
limitation, reasonable legal counsel fees and disbursements) incurred by
Sublessor by reason of or arising out of (i) the use or occupancy of the
Premises by Sublessee, or (ii) Sublessee's failure to perform or comply with any
of the agreements, terms covenants or conditions of this Sublease (including,
without limitation, the agreements, terms covenants or conditions set forth in
the Master Lease which are incorporated in this Sublease) to be performed or
observed by Sublessee after the Effective Date.
13.3 The foregoing indemnities shall survive any expiration or termination
of this Sublease, and are in addition to the provisions of the Master Lease
incorporated herein.
14. TELEPHONE SYSTEM.
-----------------
Sublessor shall notify Sublessee fifteen (15) days prior to vacating the
Premises whether Sublessee shall be permitted to use the existing telephone
system in the Premises. If Sublessor so notifies Sublessee, then Sublessee shall
be permitted to use the existing telephone system, including telephone switch
and headsets, at no additional cost during the Term of the Sublease. Sublessor
makes no representations or warranties to Sublessee regarding the condition of
the telephone system, including its fitness for any particular purpose. Upon the
expiration or sooner termination of this Sublease, Sublessee shall surrender the
telephone systems to Sublessor in the same condition as received, ordinary wear
and tear excepted or, at Sublessee's option, Sublessee may purchase the
telephone system from Sublessor for a price equal to the then fair market value
of the telephone system.
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15. FURNITURE AND EQUIPMENT.
-------------------------
15.1 During the Term of this Sublease, Sublessee shall have the right to
use, at no additional cost to Sublessee, the furniture and equipment described
on Exhibit C attached hereto (collectively, the "Equipment"). Sublessee
acknowledges that, as disclosed by Exhibit C, some of the Equipment is owned by
Sublessor ("Sublessor's Equipment") and some of the Equipment is owned by Master
Lessor. Sublessee shall use the Equipment only for the purposes for which the
Equipment was intended. Sublessee shall keep and maintain the Equipment in good
condition and repair and, subject to the provisions of paragraph 15.3 below,
shall surrender the Equipment to Sublessor in the same condition in which it was
received, ordinary wear and tear excepted. Sublessee shall reimburse Sublessor
for the full replacement cost of any item of Equipment not surrendered to
Sublessor in accordance with the provisions of this Sublease. To the extent any
item of the Equipment is damaged or destroyed, Sublessee shall, at its sole cost
and expense, promptly repair such damage or replace such destroyed item of
Equipment. The Equipment shall not be used by any one other than Sublessee and
its employees, agents, contractors, and invitees. The Equipment shall at all
times remain the property of Sublessor and Master Lessor, subject to Sublessee's
right to use the Equipment on the terms and conditions stated herein and subject
further to the provisions of paragraph 15.3 below. In no event shall Sublessee
pledge the Equipment or Sublessee's rights hereunder as security for any loan or
financing. Sublessee shall have the benefit of any warranties and guaranties in
favor of Sublessor that would assist Sublessee in repairing, maintaining or
replacing any of the Equipment. Sublessor shall cooperate with Sublessee in
enforcing such warranties and guaranties so long as Sublessee reimburses
Sublessor for any out-of-pocket costs incurred by Sublessor in doing so. In
addition to the foregoing provisions, Sublessee's use of Sublessor's Equipment
shall also be subject to the provisions of paragraph 61 of the Master Lease.
15.2 Sublessee shall maintain in full force and effect during the Term of
this Sublease, at Sublessee's sole cost and expense, a policy of special form
insurance covering the Equipment for the full replacement cost thereof. Such
policy shall name Sublessor as the named insured thereunder and shall be issued
by an insurance company reasonably acceptable to Sublessor, which consent shall
not be unreasonably withheld. Sublessee shall provide Sublessor with a
certificate of insurance evidencing such coverage prior to the Commencement
Date.
15.3 Provided that Sublessee is not in default under this Sublease at the
expiration of the Term, Sublessee may, at Sublessee's option, purchase all or
any portion of Sublessor's Equipment from Sublessor at a price equal to the then
fair market value of such Equipment. If Sublessee elects to purchase all or any
portion of Sublessor's Equipment, Sublessor shall, at Sublessee's request,
execute and deliver to Sublessee a xxxx of sale transferring all right, title
and interest of Sublessor in and to such portion of Sublessor's Equipment to
Sublessee, without any warranties or guaranties whatsoever. Sublessee agrees to
accept Sublessor's Equipment in its then present condition, "AS IS," without any
warranties or guaranties whatsoever, including any warranties of merchantability
or fitness for any particular purpose.
16. SUBLESSOR'S OPTION TO TERMINATE.
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If, on or before January 2, 2005, Sublessee fails to provide Sublessor with
satisfactory evidence that (i) Sublessee has a current Net Cash Balance of not
less than Three Million Dollars ($3,000,000), or (ii) Sublessee has obtained new
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equity financing of at least Five Million Dollars ($5,000,000), then Sublessor
shall have the option to terminate this Sublease at any time after January 2,
2005, by delivery of written notice to Sublessee not less than thirty (30) days
prior to the effective date of such termination. Upon any such termination,
Sublessee shall vacate the Premises and surrender the Premises to Sublessor with
all Equipment in place. Sublessor shall have the right to request bank
verification of Sublessee's Net Cash Balance on a quarterly basis, and Sublessee
shall provide such information to Sublessor within five (5) business days after
Sublessor s written request therefor.
17. WAIVER.
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In addition to any waivers set forth in the Master Lease, Sublessor and
Sublessee hereby waive the right of subrogation against the other, and shall use
their reasonable best efforts to cause their respective insurers to issue
appropriate waivers of subrogation endorsements to all policies of physical
damage carried in connection with the Premises or the contents thereof. The
foregoing provisions of this paragraph 17 shall survive any expiration or
termination of this Sublease.
18. BROKERS.
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Sublessor and Sublessee each represents that it has been represented only
by CPS, A Commercial Real Estate Company, as a real estate broker in this
transaction. Sublessor and Sublessee shall each defend, indemnify and hold the
other harmless from any claim made by any broker who is asserting a right to a
commission as a result of representing the indemnifying party.
19. ADDRESS FOR NOTICES.
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Sublessor's address for notices shall be 0000 Xxxxx Xxxxx Xxxxxx, Xxxxx
000, Xxx Xxxx, XX 00000, Attention: CFO, prior to Sublessor vacating the
Premises. Sublessee's address for notices shall be
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prior to Sublessee taking occupancy of the Premises. Sublessee's address for
notices shall be the address of the Premises upon Sublessee taking occupancy of
the Premises.
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20. SUBLEASE EFFECTIVE DATE.
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This Sublease shall be effective on that date when both of the following
conditions have been satisfied ("Effective Date"): (i) Sublessor and Sublessee
have executed this Sublease as set forth below; and (ii) Master Lessor has given
its written consent to this Sublease, such consent to be in a form mutually
acceptable to Sublessor and Sublessee, in their reasonable discretion.
IN WITNESS WHEREOF, Sublessor and Sublessee have executed this Sublease,
and this Sublease shall be effective, as of the Effective Date.
SUBLESSOR SUBLESSEE
EUCLID NETWORK SOLUTIONS, INC., SIVAULT ANALYTICS, INC.,
a California corporation a Delaware corporationon
By: /s/ [illegible] By: /s/ Xxxxxxx Xxxxxxx
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Its: CEO Its: CSO
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